Zurich Sells Life Insurance Book in Italy
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The Swiss insurer is disposing of a life insurance portfolio in Italy. The deal lowers credit risk and boost capital.
Zurich Insurance is selling its life and pension business to Gamalife, a Lisbon-based insurer, it said in a statement on Monday. Neither party disclosed financial details of the transaction.
The deal encompasses traditional and unit-linked policies and will see $9.5 billion in net reserves transferred to Gamalife. Zurich said this will lead to a result of roughly $1.2 billion of capital and add 11 percentage points to its solvency ratio.
Zurich, which said the sale lowers its exposure to credit risk considerably, expects to benefit from a $200 million boost in liquidity as well.
Questions & Answers
Q.Which specific types of policies are included in the sale to Gamalife?
Which specific types of policies are included in the sale to Gamalife?
The transaction includes both traditional life insurance policies and unit-linked policies. These two categories represent the full scope of the life and pension business being transferred to the Lisbon-based insurer.
Q.What is the total value of net reserves being transferred as part of this deal?
What is the total value of net reserves being transferred as part of this deal?
The sale involves the transfer of approximately $9.5 billion in net reserves to Gamalife. This figure represents a significant portion of Zurich's life insurance portfolio in Italy being moved to the new owner.
Q.How will this transaction impact Zurich's financial standing and risk exposure?
How will this transaction impact Zurich's financial standing and risk exposure?
Zurich anticipates a capital increase of roughly $1.2 billion and an 11 percentage point rise in its solvency ratio. The company also expects a $200 million liquidity boost and a considerable reduction in credit risk.
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